Madang Guidelines

THE MADANG
GUIDELINES
PrincIples for the Development of National Offshore Mineral Policies
APPENDIX:
Report of the Offshore Mineral Policy Workshop Madang, Papua New Guinea 22nd_26th February 1999
(SOPAC Miscellaneous Report 323)
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UIDELINES
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A study based theRecommendationsProceedingsa Workshop on and of on Offshore MineralsPolicy, in Madang, held Papua New Guinea February in 1999, hosted; organised sponsored theGovernment Papua and by of New Guinea, the Metal MiningAssociation Japan(MMAJ), thePacific of Islands Forum Secretariat theSouth and Pacific AppliedGeoscience Commission (SOPAC)
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December 1999
THE MADANG GUIDEliNES
TABLE OF CONTENTS
FOREWORD
SUMMARYAND CONCLUSIONS
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THE MADANG GUIDEliNES MADANG GUIDI~LINES -OFFSHORE MINERALDEVEWPMENT POLICY

Introduction .~
Offshore Mineral Resources """'."'.'.""' "'.."""""" National Policy for the Offshore Exclusive Economic Zone Offshore Mineral Exploration and Development Policy Fiscal Regime for Offshore Mineral Development and Exploitation Environmental Considerations in Offshore Miner~ Development .".""""""""""""""""'" Key Factors in Developing an Environmental Assessment Program Outline for Impact Assessment Efforts """"""'.'.""""'..."'.".'."."'" Environment Related Considerations for Exploitation Associated Issues Associated Issues in Policy Formulation Fishery Considerations in Offshore Mineral Development Industry in Offshore Mineral Development Marine Scientific Research , ACKNOWLEDGEMENTS
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THE MADANG GUIDELINES
FOREWORD
The human race has long viewed the world's oceansas a final frontier for the discoveryand exploitation of non-renewable mineral and energyresourcesand this view was at least in part responsible for Ambassador Arvid Pardo of Malta, in a speechto the General Assembly of the United Nations in 1967, proposing that l the resourcesof the deep sea portion of this final frontier were the "Common Heritage of Mankind". As a result, the United Nations established an Ad Hoc Committee on the PeacefulUses of the Seabedand the Ocean Floor Beyond the Limits of National Jurisdiction, from which nearly a decadeand a half later was to evolve the 1982 UnitedNationsConvention theLaw of theSea(UNaGS). Under UNCLOS the Exclusive on Economic Zones (EEZ) of individual nations were established,normally extending 200 nautical miles offshore, over which nations have both sovereigntyand de facto an obligation to its citizens for the stewardship of the use and the exploitation of its resources. The belief in the mineral potential of the deep oceanand the EEZs is largelybased on two facts and two assumptions.The two facts are that (1) past and presentnear-shoremineral exploration and development, largely within the Territorial Sea (within 3 nautical miles of the shoreline)of most nations has defined many different types of mineral deposits that have been, or arebeing, commercially exploited and (2) new types of mineral occurrences,that are potentially commercial,have been recentlydiscovered in both the EEZs of individual nations and in the deep ocean.Therefore, it is assumedthat (1) known commercial deposit types will extend to deeper water depths within the EEZ, where further development will take place, and (2) new deposit types of mineral resourceswill continue to be discovered and, if economically viable, subsequentlyexploited. When the above is coupled with the fact that the world's EEZs and the deep-seaare largely unexplored, then-.thepotential for the discovery,particularly within the 200 nautical mile Exclusive Economic Zone (EEZ) of individual nations, of known and new types of commercial mineral deposits is very high. Recentdiscoveries (within the last 2 decades)of cobalt-rich manganese nodules within the EEZ of the Cook Islands, cobalt-rich crust within the FederatedStatesof Micronesia (FSM), Marshalls and Kiribati and Tuvalu, and of high-grade, gold-bearing massivesulfide deposits on the seafloors of the EEZs of Japan, Fiji, Tonga and PapuaNew Guinea, have alerted the nations of the world to both the new opportunities for offshore mineral development and to their responsibilitiesto ensure that suchdevelopments will be socially ~nd environmentally responsible and sustainable. These issuesare particularly critical to addresswith respect to offshore mineral development in that suchdevelopmentswill be taking place within a complex and interdependent ecosystem,particularly with respectto fisheries,where mineral developmentimpacts may have national, regional and international consequences. Equally important to recognizeis that in many casesthe
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THE MADANG GUIDEUNES
mineral occurrences themselvesmay have unique ecosystems, particularly in the caseof polymetallic massive sulfide occurrences,about which we have little or no knowledge and which may themselveshave significant economic potential. To date, however, few if any nations,have in place comprehensivepolicy and legislativeregimes to effectively manageoffshore mineral developmentsbeyond those that may occur within their Territorial Seas. Even in these casesthe offshore mineral developmentsare normally governed by existing mineral policy and legislation that has been formulated and enacted for onshore mineral developments.Such policies and legislation are generally not applicable for the exploration and development of mineral resourceswithin the deep-seaportions of the EEZ. Therefore, it is imperative that individual nations begin the process, in consultation with industry and other stakeholders, developing appropriate regimesand legislation to manage of present and future mineral exploration, developmentand exploitation within their EEZs. To provide a basis for the future exploration and possible development of offshore mineral resourcesan expert group was convened under the auspicesof SOPAC in Madang, PapuaNew Guinea in February 1999 to addressthe issuesof new policy and legislativeregimesto effectively manageissuesarising from offshore mineral exploration and potential development. It is believed that the recommendationsof this expert group "The Madang Guidelines" provide a useful basis to assistnations of the international community in their formulation of effective policy and legislation for offshore mineral development. In particular the Madang Guidelines provide for the accommodation of the unique attributes and occurrencesof the deposits themselves, the "pioneering nature" of exploration and developmentactivities and for a broad range of associated issuesincluding (a) environmental impacts and impact as.sessment, stakeholderinterests,fisheries impacts and the inter-relations of government, industry and marine scientific research. As such the "Madang Guidelines" are a pioneering effort to ensure the sustainabledevelopment of mineral resources in the EEZs of the nations of the world. I commend them to you.
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Alf Simpson
Director of .S"OPAC
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SUMMARY
Recentdiscoveries of gold-rich polymetallic massivesulfide deposits and cobalt-rich manganesenodules within the EEZs of severalnations has renewed corporate interest, beyond the traditional interest in nearshore mineral resources,in the exploration and possible development of offshore mineral resources in deeperportions of EEZs and in the open oceans.The immediate impact of the renewed interest in offshore mineral resource development, coupled with the ratification of UNCLOS and the formal establishmentof the International SeabedAuthority, has been that most nations must begin to (a) addressthe requirement of UNCLOS in terms of defining the extent of their EEZ and (b) develop appropriate policy and legislation to govern offshore mineral exploration and development. Existing mineral policy and legislation developed for on land mineral exploration and development cannot be effectively applied to offshore mineral exploration and developmentbecauseof the unique attributes of the deposits themselvesand the "pioneering nature" of exploration and development activities. Equally important is the need to addressa range of associated issuesincluding (a) environmental impacts and impact assessment, stakeholder interests,fisheries impacts and the inter-relations of government, industry and marine scientific research. To addressthe above issuesa set of 19 recommendations,"The Madang Guidelines", have been developed and are proposed as a basis to formulate effective and enabling policy and legislation by governments to govern offshore mineral exploration and development.
,~OPACMiscellaneolis 362 Report

1. As appropriate, nations should take relevant measuresto ensurethe provisions of the 1982 Convention become fully implemented within their jurisdictions. Nations should move forward rapidly to delineatethe baselinesfrom which the various jurisdictional zones under the United Nations Convention on the Law of the Sea (UNCLOS) ("1982 Convention") are measuredand to deposit the appropriate charts and list of co-ordinates with the United Nations. In the caseof potential extensions of the continental shelf beyond 200 nautical miles, these data should also be gathered as soon as possible and the appropriate claims filed (bearing in mind the 10-year limit from the date of ratification by the coastal state). Measuresshould be taken to designatearchipelagicand other sealanes the purpose of navigation in for accordancewith the 1982 Convention and other international conventions. Nations should proceed to selecttheir preferred dispute resolution mechanismas required under the 1982 Convention In the interests of consistencyand simplicity of administration, the unique nature of offshore mineral development activities and the diverse nature of stakeholderinterests,coastalstatesshould develop a comprehensive 'Offshore Mining Act,' where appropriate, as a distinct country-specific regime which is separatefrom their existing onland mining acts. The "risk" components associatedwith the exploration and exploitation of offshore mineral resources should be assessed considered in the development of an appropriate licensing and fiscal regime. and Individual nations should develop a fiscal regime specific for offshore mineral development that accounts for the unique economic aspectsof such exploration and development, in particular the high costs of exploration, development and technology development. Initial offshore mineral developmentsshould be viewed as "pioneering efforts" and as such be granted appropriate economic incentives to promote investment and development.
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10. Recognisingthe appropriate instruments within the 1982 Convention regardingthe conservation and managementof the living resourceswithin coastalstates'EEZs, measuresshould be taken to minimise adverseimpacts to the marine environment and to traditional and non-traditional usesof the sea that may be causedby offshore mining. 11. Where appropriate, coastalstatesshould consider making a declarationthat the non-living resources beyond the 3-mile limit from the Provincial coastlinesare a "Common Heritage of the Nation". 12. Coastalstatesshould adopt a proactive approach in all significant decision making activities related to environmental concerns associatedwith offshore mineral exploration and exploitat.ion. 13. The collection of baseline environmental data should be a condition of any marine exploration licence. Collection of baselinedata should begin as early as possible followed by systematicdata collection throughout the term of the exploration licence.
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14. Stakeholdergroups and their interest should be clearlydefined during the formulation of any Offshore Mineral Development Agreement to ensure that the interests of the stakeholders adequatelyconsidare ered and, where appropriate, incorporated into the agreement. 15. Appropriate programs will need to be developed for the assessment and compensation for, impacts of, of marine mineral development activities on traditional and commercial fishery activities. 16. To facilitate the development and sustainability of national fisheries government and industry should consider joint development of industrial support facilities that could service both industries and allow for additional development (mineral processing, fish canning). 17. Offshore mineral policy and legislation should ensurethe confidentiality of corporate researchand development data within their license area/so 18. To ensure the long term capability of the coastalstatesto effectively monitor offshore mineral resources activities, relevant government representativesshould participate in all at-seaphasesof MSR, exploration and evaluation and that provision be made, either through appropriation or the creation of specialuse funds within the responsibleagency(ies), provide adequatehuman and fiscal resourcesrequired for to needed data collection and collation, monitoring and enforcement activities. 19. Recognisingthe unique nature of the biota associatedwith active hydrothermal zones,activities that ensure an adequateunderstanding of the biota communities and the impacts of any associatedmineral exploration and exploitation should be undertaken by MSR and Industry.
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SOPACMiscellaneous Report362
THE MADANG GUIDELINES -OFFSHORE MINERAL POLICY

INTRODUCTION The mineral potential of the world's oceans,both near shore and deep-sea, largelyunexplored alis though the potential for new discoveries of commercial, or potentially commercial, mineral deposits is considered very high. The highest mineral potential is within the 200 nautical mile Exclusive Economic Zone (EEZ) of individual nations where, to date,the vast majority of exploration and development has been confined to the Territorial Sea(three nautical miles from the shoreline) -only a small fraction of the total area of the EEZ. Perhaps ironically, the most extensivelyexplored area of the world's oceansis arguablythe deep-sea Clarion-Clipperton zone (easternPacific Ocean) which has beenthe site of extensive international exploration for manganesenodules by many nations for over four decades. The exploration successin the ClarionClipperton Zone led to extensive exploration in the southeastPacific, central Indian Ocean, offshore south Australia and the South Pacific (Cook Islands). Of these,only the manganese nodules of the Cook Island's EEZ appearsto have sufficient size and nodule grade to be considered an alternative site for possible mining. Most recently the discovery of potentially economic polymetallic sulfide deposits,particularly those with high gold values within the EEZ's of individual nations,has sparked interest on the part of both governments and industry with respectto their possible development.The gold-bearing massivesulfide occurrences, individually with a resourcepotential of 50-250 million tonnes (t), occur primarily in the Manus, Lau, Fiji, and Mariana Basins of the western Pacific (Clark 1999, Rao 1999,Kia and Lasark 1999, Binns and Dekker 1999, Ponia 1999). The discovery in the EEZs of many nations of potentially commercial mineral deposits,in particular the above noted manganesenodules and gold-rich massivesulfides,posesa number of new challengesfor both government and industry. Specifically,governments must develop new policy and legislativeregimes to effectively manageissuesarising from offshore mineral exploration and potential development.To date, however, few if any nations, have in place comprehensivepolicy and legislativeregimesto manageoffshore mineral developments beyond those that may occur within their Territorial Seas where offshore mineral developments are normally governed by existing mineral policy and legislation enacted for onshore developments. Such policies and legislation are generallynot applicable for the exploration and development of mineral resourceswithin the deep-seaportions of the EEZ. Therefore, it is imperative that individual nations begin the process,in consultation with industry and other stakeholders, developing appropriate regimes of and legislation to manage present and future mineral exploration, developmentand exploitation within their EEZs. In recognition of the above,an Offshore Mineral Policy Workshop was held between 22-26 February 1999 in Madang, Papua New Guinea. The Workshop was hosted by the PapuaNew Guinea (PNG) Department of Mineral Resources, coordinated by the South Pacific Applied GeoscienceCommission (SOPAC) and sponsored by the Metal Mining Agency of Japan (MMAJ) and the South Pacific Forum Secretariat.This Workshop combined national, regional and international expert presentationswith w>rking group sessions and plenary discussion.The primary goals of the Workshop were,based on inputs from the assembled specialists,to review and revise the draft PNG Green Paperon Offshore Mining Policy (Government of PapuaNew Guinea 1999, Wanjik 1999,James 1999)to developa list of recommendations for individual nations to consider in the preparation of offshore mineral policy and legislation.
In the following, based on the paperspresentedand subsequent discussions,a brief overview is presented on the occurrence and nature of polymetallic massivesulfides and manganesenodules, presently the focus of interest by industry for commercial development, within the EEZs of severalnations of the western Pacific. Based on this overview, the key issuesinherent in the formulation of an appropriate marine resources development policy and enabling legislation are discussedfollowed by a number of specific recommendations. This is followed by a discussionof environmental, social, cultural and related issues that must also be considered and accommodated in an overall offshore minerals policy. The combined recommendations that follow each section constitute the "Madang Guidelines for Offshore Mineral Policy".
OFFSHORE MINERAL RESOURCES
Within the EEZs of severalnations, deposits of black sands,chromite, gemstones, gold, diamonds, metalliferous muds, phosphate, platinum, sand and gravel, salts,silica, sulphur and tin have been recognized and exploited for centuries. In addition, serious considerationhas been given to the mining of metal-rich seafloor oozes and sediments in the Red Seaand the recovery of cobalt-rich manganese crusts from deep-sea seamountsand ridges. At present, however,the above mentioned manganese nodules and gold-rich polymetallic sulfide deposits which occur within the EEZs of many nations are the subject of increased exploration and evaluation for commercial exploitation (Clark 1999, Rao 1999, Kia and Lasark 1999, Binns and Dekkar 1999,Ponia 1999).
Manganese Nodules Manganesenodules are spherical or egg-shaped globules of metallic oxides measuring from 2 to 15 centimeters (cm) in diameter, and are spread on flat seabedsurfacesat depths of 4000 to 6000 metres (m). They contain mainly iron and manganese oxides, but also contain nickel, copper and cobalt, amongst others. Manganesenodules were first discovered in the deep seaduring the 1873-1876expedition of the Challenger but remained little more than a scientific curiosity until the 1950swhen large nodule fields were discovered in the Pacific Ocean. During the 1960sand until the late 1970s,manganese nodules were the subjectsof intense scientific researchand exploration by private industry (Kajitani 1999,Tesishima 1999). Although manganesenodules occur in all of the wotld's oceans, most famous areais the Clarionthe Clipperton nodule field, an area of roughly 2.25 million squarekilometres (km~ that is estimated to contain (McKelvey 1986)2.1 billion dry t of potentially recoverablenodules.The mineable areawould be 1.25 million km2,with a nodule concentration of 11.9 kilograms per squaremetre (kg/m~ of nodules containing 1.3% nickel, 1 % copper, 25% manganese, 0.22% cobalt, and 0.05% molybdenum. In 1995, Clark, et al., estimated that the cobalt rich manganese nodule resourcesoccurring within the EEZ of the Cook Islands was approximately 7.5 billion dry tonnes of nodules containing 32.5 million tonnes of cobalt, 24.5 million tonnes of nickel and 14 million tonnes of copper (cut-off grade of >5kg/m~ in an area of 652 223 km2. According to Ponia (1999), a feasibility study conducted for the Cook Islands Government has examined exploiting the nodule resourcesoccurring within the EEZ of the Cook Islands.The feasibility study proposes a mining scenario with an output of about 3000tonnes of cobalt per year,the equivalent of around ten percent of the wotld's cobalt consumption that would be mined from a small area north of Aitutaki. The proposed mining areawas chosen for its high nodule abundance,the high cobalt content of the nodules and the presenceof a relatively flat terrain that would facilitate the harvesting of the nodules.The nodules would be gathered by dredging, using small beam trawlers especially modified for the recovery of nodules. Once
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brought to the surface,the nodules would be loaded onto large transport vesselsfor shipment to a processing plant (assumedto be in New Zealand)where the nodules would be subsequentlyoff-loaded, stockpiled and later reclaimed for smelting and refining at the plant.
PolYmetallic massive sulfides Polymetallic massivesulfide deposits are concentrations of copper, lead and zinc sulfide minerals, often with high concentrations of gold, which occur as thick blankets,sulfide-cementedbreccias,disseminations and as the well-known "black smoker chimneys", the latter considered to be hydrothermal mineral deposits in formation. Since the discoveryof deep-sea polymetallic sulfide deposits (PSD) in 1978, many authors have noted the similarity of such occurrencesto deposits now being mined on the continents. In particular, they have noted the PSDs to be similar to the deposits of Cyprus (Adamides 1979),japan (Halbach et.al. 1989b) and the numerous massivesulfide deposits of Canadaand Australia. Extensive literature now documents the widespread occurrence of these deposits along the East Pacific Rise, the Galapagos spreadingcenter, and the Mid-Atlantic Ridge implying that suchdeposits are widespread throughout the major oceans of the world. The western Pacific polymetallic massivesulfide deposits, many high in gold content, were first discovered in the South Lau Basin in 1984 (Stackelberget al. 1985)and subsequentlyin the northern Lau Basin, Okinawa Trough and the North Fiji and the Manus Basins.At the presenttime, the PSD occurrences of primary interest to industry for possible commercial developmentare those discovered in the Manus Basin of Papua New Guinea (Binns et al. 1997).These occurrenceswere leasedto private industry by the Government of Papua New Guinea in November 1998. According to Binns, et al., 1997, the easternManus Basincontains three known active hydrothermal zones (pASCMUS, DESMOS and SusuKnolls) which are rapidly becoming recognized as regional-scale modern analoguesof volcanic hosted mineral fields on land. In ,thePACMUS field, Binns, et al. (1997), reports that "... [c]himneys dominated by chalcopyrite and sphalerite,with barite and some bornite, have averagecompositions of 11 wt% Cu, 27% Zn, 230ppm Ag, and 18 ppm Au.. .." And, in the Susufield " analyses three Suzettechimneys average19% Cu, 22% Zn, 125 ppm Ag and 23 ppm Au " If the of value of the known mineralisation in the easternManus is calculatedon a per tonne basis it would be worth approximately US$500 to US$600/tonne in contained metal (gold, copper, zinc). The actual economic potential of PSD is unknown at present, as there is insufficient information available,with respectto the geology, engineeringand technology of possible mining and extraction, to conduct a feasibility study.As noted above,however, the gross value of selectedspecimensrecovered from the deposits is sufficient to warrant further exploration. Before industry can proceed to make the necessary investmentsrequired to fully evaluatethe economic potential of nodule and polymetallic sulfide deposits,and before governments can effectively administer and manage such developments,it is necessary have in place comprehensiveand enablingmineral policy and to legislation which is specific to the exploration and development of these offshore mineral resources.
NATIONAL POliCY FORTHE OFFSHORE EXCLUSIVE ECONOMICZONE With the recognition of the economic potential of new occurrencesof marine mineral resourceswithin the EEZ, there has been a national and international recognition of the need to establishlegal jurisdiction over these resources.The recognition of a national need for exclusivejurisdiction of the near shore environments has also been a major factor (among several)that led national governments to define a Territorial Sea
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TH1\ MADANG GUIDEUN}~S

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(mean high tide to three miles offshore) with a larger contiguous zone (nine miles offshore). Similarly,the recognition of the resourcepotential of deep-oceanmanganese nodules led to serious questions concerning the ownership of all deep-oceanresources.In 1967 AmbassadorArvid Pardo of Malta, in a speechto the General Assembly of the United Nations, proposed that suchresourceswere the "Common Heritage of Mankind". As a result, the United Nations establishedan Ad Hoc Committee on the PeacefulUses of the Seabedand the Ocean Floor Beyond the Limits of National Jurisdiction, from which nearly a decadeand a half later was to evolve into the UnitedNationsConvention theLaw of theSea(UNCLOS) under which the on International SeabedAuthority (ISA) was formally establishedin 1994 (International SeabedAuthority, 1998, Lodge 1999). A particularly significant result of UNCLOS was the designationof the EEZ as "a zone normally extending not more than 200 nautical miles from the baselinesfrom which the breadth of the territorial seais measured" (United Nations 1981) within which a coastalstate has sovereignrights over the natural resources of the seabed,subsoil, and superjacentwaters.This sovereignright of the nation over the resourcesof the EEZ requires that individual nations establishboth a national policy and appropriate legislation to govern mineral resource development within their EEZs. In the following, the basic elementsof the required policy and legislation are presented.
Elements Marine MineralPolicy Legislation of and The primary element in defining a rational marine mineral resourcespolicy is to first establishthe territorial boundaries of the EEZ, within the framework set forth by UNCLOS, to which the policy will be applied. The recently proclaimed EEZs of many,if not most, nations have not been sufficiently surveyed and/ or defined to ensure that exact territorial boundaries are known and, more importantly, accepted by other nations. Once the issue of territorial boundaries has been clarified, a nation can begin to establishits marine mineral resource policy: the key elementsof which are sovereignty,self- sufficiency and self-determination.
BasicObjectives a MarineMineralPolicy of Although the resourcesand the level of resource endowment within the EEZ of individual nations will vary greatly,there are a number of fundamental objectives that a nation should strive to achieve with its offshore mineral policy. Among the most important are the following: .Promote efficient and timely exploration, development,and production .Encourage diversification in resource development .Ensure conservation in exploitation of the resources .Maximize economic return on resource exploitation .Protect the enviror1tI1ent .Contribute to overall national development in multiple sectors In achieving the above objectives,it must be rememberedthat marine mineral resourcesare nonrenewable national assets. such,a nation's marine mineral resource policy, while promoting the responAs sible development of the resources,must also ensurethe optimization of economic and social development for present and future generationswhile simultaneouslypreserving the environment and traditional values of the nation.
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THJ.: MADANG GUIDELINES

-,Co.-' .--
Characteristics a Marine Mineral Policy of In achieving the objectives of a national offshore mineral resource policy it is necessary to address the characteristics of the marine minerals industry with respect to exploration, development and exploitation of the resources. In particular, there are five major attributes of the industry and its activities that are critical to consider in policy formulation if a nation is to attract foreign investment for the exploration and development of the resources' (Clark 1999). These five attributes are: .Exploration .Exploration, .Development .Project is high risk and cosdy development and exploitation all require advanced technology and exploitation is capital intensive
economics are subject to market and price instability
Because of these attributes, it is imperative that a national offshore mineral resources policy recognize, and be responsive to, these factors if it is to attract foreign investment. At the same time, the nation cannot modify its overall marine mineral resource policy to such an extent that it does not achieve the major objectives set forth in the above.
Madang Guideline Recommendations

1. As appropriate,nationsshouldtake relevantmeasures ensure provisionsof the 1982 Convention to the become fullY implemented within theirjurisdictions. Nations shouldmove forward rapidlY to delineate baselines the from which the various jurisdictional zonesunder the United Nations Convention the Law of the Sea (UNa-OS) ("1982 Convention'; are measured on and to deposit theappropriate chartsand list of co-ordinates with the United Nations. In the case potential extensions the continental of of shelf beyond 200 nautical miles,these data shouldalso be gatheredas soonaspossibleand theappropriateclaims filed (bearing mind the 10-:]earlimit from the dateof in ratification by the coastalstate). Measuresshouldbe taken to designate archipelagic othersealanes theputpose of navigationin accordance and for with the 1982 Conventionand otherinternational conventions. Nations should proceedto selecttheirprefetTeddisputeresolutionmechanism requiredunder the 1982 Convention. as
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OFFSHORE MINERAL EXPWRATION AND DEVELOPMENT POUCy The key elements of the policies and legislation under which onshore mineral exploration and development take place are well established in most nations. Indeed, in many countries the same policies and legislation have been applied, with minor modification, to nearshore mineral development (Wanjik 1999). Few if any nations, however, have developed policies and legislation that are specific for deep-ocean marine mineral resource exploration and development and which recognize and accommodate the unique aspects of such activities. The following discussion is directed specifically toward defining some of the specific factors that should be considered in the formulation of exploration and development policy, legislation and development agreements. The following discussion focuses on the exploration phase and development agreements in particular because these are the major issues presendy facing governments and industry. In the following, seven basic parameters are briefly discussed with respect to formulating policy and legislation for offshore
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mineral development (Clark 1999).The majority of theseissueswould be included in exploration licences/ leasesgiven, and development agreementsentered into, by an individual nation. These parametersinclude: commodities sought, exploration area,exploration areashape,duration of exploration licence, revenues, performance control, and retention and relinquishment.
Commodities Sought A clear statementis necessary with respectto the individual commodities sought (and eventually developed and marketed) within an exploration area.This is becauseores derived from the majority of anticipated offshore mineral developments)will be mineralogicallycomplex. As a result, a definition of individual commodities upon which royalties (or other payment) will be made is essentialto ensure an oPtImum economic return to the nation.
ExplorationArea The exploration areaallocated within a nation's territorial seaor EEZ is normally dependent on two factors: (1) the mode of occurrence and spatial distribution of the resourceand (2) the total exploration area (normally expressedin km~ that is availablewithin the EEZ. As examples,nodule deposits tend to occur as thin veneerscovering seamounts or abyssalplateausrequiring exploration areasthat encompassseveral thousand km2 in orde~ to have sufficient area for discoveryof a viable mine site,whereas,polymetallic massivesulfide occurrences are more restricted in size,and have higher ore gradesand lower tonnage,requiring considerably smaller exploration areas.However, becauseof the limited knowledge concerning most offshore mineral occurrences it is probable that initial exploration policy and legislation will grant much larger areasin the offshore than would be granted onshore. The total availablearea for exploration within an EEZ is normally a secondaryconsideration in determining a nation's policy with respectto the size of an individual exploration area.The main policy decision that must initially be made,assuming that the availableareais sufficiently large to provide for severalexploration areas, whether to grant the entire areaas a single licence or to divide the areainto several smaller is exploration areas.Normally it is in the interest of the licensing nation to proceed with severalexploration areas,rather than one large area,as sucha policy encouragescompetition among investors and will ultimately provide a broader baseof data upon which the nation can make developmentdecisions.In caseswhen the total exploration area within the EEZ is either quite small or the areasof mineral occurrence are known to be restricted, a nation may need to grant the entire areaas a singlelicence in order to attract investor interests.
Exploration Area Shape Normal licencing procedures are designedto offer exploration areasthat are essentiallyequidimensional and contiguous. This practice is appropriate for most offshore mineral resources,however, in the caseof polymetallic massivesulfides that are associatedwith linear zones and may be discontinuous along a zone, the licence areaswould perhaps better be defined by long narrow tracts either parallel (providing a ,naximum area of similar geology) or perpendicular (providing maximum variation in the geologic setting) to the axis of the linear structure. A possible alternative to either the equidimensionalor the elongateshapeis to issuelicencesto cover whatever areasthe investor may wish to define (within the leasesize limitations previously set). Such a procedure has both ,be.n~fits and drawbacksto the licensing nation and is generallynot recommended without strict controls and relinquishment regulations.
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Duration of Exploration Licence
The duration of an exploration licence should be determined by a number of factors, however,the duration should provide sufficient time to explore the area,to the point that specific economic targets for development can be defined. Licences can be extended based on performance criteria, which would normally be contained in the legislation of the nation issuingthe licence. Such extensionsare usuallytied to a sequential relinquishment of a portion of the total exploration area. In all cases, time frame should be set and the clearly stated so that both the government and the investor can fulfill their obligations without dispute. As a general rule, exploration licenceswould be considered short term (5 years)or long term (20 years)but would not exceedthese limits without exceptional reasons:this may be the casewith respectto certain offshore mineral resources.
Revenues
Exploration licencesare normally granted with the provision that if an economic deposit is found the investor has the right to develop and exploit the deposit under the fiscal regime defined by the nation for offshore mineral resource development. As a result, severalmethods are used to securethe appropriate revenues(economic rents) to the government. Among the most common methods are the following:
Performance Control
Regulations are added to exploration licencesto ensure that the investor will proceed with the proposed work plan in a timely and professionalmanner. Suchregulations are enforced by (a) requiring that the investor post a performance bond that is forfeited if work is not done or (b) by suspensionof the exploration licence(s)if work does not proceed. Normally performance criteria are set in terms of money spent, area explored, work completed, or various combinations of the above. Performance controls are essentialto ensure that a nation's resource endowment is not unduly controlled by investors for long periods of time without exploration activity taking place.
Retention and Relinquishment
Exploration licences should provide a set schedulefor both the amount of area that can be retained and the portion that must be relinquished on a yearlybasis. In standardpractice, the relinquishment of an area proceeds to a specified minimum level at which time the investor is allowed to retain rights if (a) a yearly,and normally escalating-rent,is paid per unit area; (b) a specified areais transferred to either development or mining; or (c) exploration continues to meet performance criteria. Specified retention and relinquishment proceduresare essentialfrom the government's perspectiveto ensure that large areasof the national domain will continuously be availablefor explor~tion and possible development. Additionally, it ensuresthat exploration by any single company will proceed in a timely and professional manner. The above brief discussion of the basic components of offshore mineral policy and legislation, and the various issues that should be considered in their development,is not intended to be all-inclusive but rather to provide a basic checklist for governments as they proceed to develop appropriate policy and legislation. In the development of offshore policy and legislation one of the most important issuesto consider, in addition to the above,is that of the fiscal regime under which offshore mineral developmentand exploitation should take place.
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Madang Guidelines Recommendation

6. In the interests consistency simpliciryof administration,the unique natureof offshore of and mzneraldevelopment activitiesand the diverse nature of stakeholder interests, coastal statesshoulddevelop comprehensive a 'Offshore Mining Act, , whereappropriate,as a distinctcountry-specific regime which is separate from their existing onland mining acts. 7. The "risk" components associated with the explorationand exploitationof offshore mineral resources shouldbe assessed considered thedevelopment an appropriate licencing and fiscal regime. and in of
FISCAL REGIME FOR OFFSHORE MINERAL DEVELOPMENT AND EXPLOITATION In general, the fiscal regime for offshore mineral development and exploitation will be developed within the broader framework of the nations overall economic policy and the legislative instruments that have been developed for implementing that policy. Existing economic policy and legislation within most nations provides for various direct and indirect taxes and specific tax incentives which de facto determine (a) the profitability of any economic enterprise (such as an offshore mineral resource development and (b) the return to the government from the exploitation of the resource. In the following a brief overview of the major components of a fiscal regime, which would be applicable offshore mineral resource development, are briefly reviewed. It should be noted, as pointed out by Fortin (1992) that the fiscal policy and regime of one nation cannot be easily "borrowed" from another nation since fiscal regimes are the product of the specific circumstances that exist in each nation. This caution should be equally applicable to the development of fiscal regimes developed for offshore mineral resources.
Components a mineral sector of fiscal regime Mineral taxation methods vary in form and application within individual Governments. The taxation structure of a nation often determines whether or not a given project is economically viable and the government's share from the exploitation and utilization of the nation's resources (resource rent). For the majority of nations the taxes levied on a mineral development are either direct (taxes paid directly by the company to the Government) or indirect (fees and costs paid to other government agencies or individuals and government mandated activities paid for by the company) taxes. Among the most common direct taxes are the following:
Direct Taxes .Income tax. Often called a profit tax, an income tax is normally a percentage of the profits of an
enterprise. .Rf!Yolry tax. Often called a production tax the royalty tax is normally a percentage levied against the amount of a commodity produced or the sale price of the commodity produced. There are, however, many variations used in the calculation of the royalty tax. .Import dury. A tax levied against the value of imported equipment and materials used in a mining enterprise. Normally, not all imports are taxed and this tax is often highly discretionary. .Export tax. A tax normally levied against the value of the commodity exported. If the commodity is sold domestically it is normally subject to a sales tax in lieu of an export tax.
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.Withholding tax. A tax levied on the remittance of profits or dividends abroad.This tax is normally levied on nonresidents but may also apply within certain corporate structures. .Local taxes. many nations the provincial and or local levels of government often have vested rights In to tax mining activities-these taxesare often called use taxesas they include taxes for education, roads and property. .Additional ProfitsTax. A tax levied on profits in excessof a set amount (or level of IRR) which normally increasesincrementally with level of profit. .Other taxes. addition to the above there are normally a large number of other direct taxes that are In levied againsta mining activity. These include, but are not limited to the following: rental fees,registration fees, transportation, water, environment (compensationfees),and in special circumstances,a value added tax (VA1).
IndirectTaxes .Landowner compensation. Normally a fee paid directly to the owner of the land upon which the mining activity will take place or, in rare instances, paid directly to the national government. .Local component In many nations there are strict rules with respectto the use of domestic goods rules. and/ or labor, normally a percentageof the total, which may result in increasedcosts. Additionally, many nations have a requirement for the company to participate in overall development that is an additional cost. .Foreign exchange andregulations. rules Normally imposed in sucha way that the company experience foreign exchangelosses or encountersincreasedtransactioncosts when exchangingor transferring foreign exchange.In specific casesof borrowing within the country, additional taxes may also be imposed. .Equi!J participation. Normally takesthe form of free equity participation in a project in extreme cases but usuallyis a carried equity interest, also known as deferred equity,which allows the government to put up its equity share from future earnings. .Transfer of technology know-ho~Most commonly applies to the cost of acquiring and transferring and patents or other proprietary property to the host country as a condition of undertaking the mining activity. This was a particularly contentious issue in negotiations under UNCLOS.
Tax Incentives In recognition of the unique aspectsof mineral resource developments,both onshore and offshore, existing policy and legislation normally provides for the following economic incentives: .Tax holiday. initial period of time in which a mining enterprise is not subject, or only partially An subject, to all types of tax liabilities. N?rmally this period is approximatelyfive years and, in special cases,ten years or more. .Deductions against income Covers a range of issuessuchas depreciation, amortization and depletion tax. allowanceswhich can be deducted as costs,thereby,reducing taxableincome. Deductions are commonly only allowed for certain types of equipment or for specific expenditures.Specialapproaches have been developed in many countries to either speedup (accelerateddepreciation) or slow down (defined number of years)individual deductions.
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.Interest deduction. mining enterprisesare capital intensive,the common practice to finance the venAs tures is through loans. Therefore, most nations have provisions for allowing the deduction of all or part of the interest on borrowed money. .Loss carry fonlJarelLargely becauseof the cyclical nature of the mining industry companies enjoy profitable yearsand endure yearsof loss. In the years of loss the amount of the loss can be "carried forward" as a cost and deducted from taxable income in subsequent profitable years.The terms of loss carry forward, particularly with respectto the applicable time, is often specified.The converse of loss carry forward is "loss carry back" which requires an amended tax return. .Tax credits. deduction from taxable income allowed by the government specifically for investment of A profits in the country. The amount of deduction is normally a percentageof the amount invested domestically. .Research anddevelopment deductions against Deduction allowed for researchand development activities tax. in either pioneering endeavours,suchas deep-sea mineral exploration and development, or for the development of new technologies of particular interest to government and industry e.g. Improving environmental or economic efficiency of a project.
Additionalconsiderationsestablishing in a.fiscalregime In addition to the above fiscal issuesthere are a number of other issuesthat may directly impact the development of fiscal regimes for the development and exploitation of offshore mineral resourceswithin the EEZ. Among the most important are the following: Financial AnalYsis projects. a result of the anticipated long time-frame for many offshore mineral of As resource developments (it has been 4 decadessince manganese nodules in the Clarion-Clipperton Zone were evaluated for development) it is extremely difficult, if not impossible, in the initial stagesof exploration and development to construct an accuratefinancial analysisof a proposed project. Indeed, any estimation of an Internal Rate of Return (IRR) or the Net PresentValue (NPV) based on present economics would be of little value either to the Government or to industry. Therefore, suchanalyses should be viewed primarily as indicators of future profitability and should not be used by government for the determination of the fiscal
regime.
RingFencing. many countries,expensesincurred in the exploration of one area,which exceedthe In expensescalled for in a work program, can be credited as expenseson an adjacentproperty owned by the same company in order to fulfill the work program on the secondarea.In essence, company can expend all a of its effort on one property, while holding a secondproperty, without doing any work on that property. Alternatively, a company may be able to mine, at a profit, on one property yet deduct the costs accrued on other properties in order to reduce their taxable income. In the caseof offshore mineral exploration and development, where one company holds two or more licences,theseproblems could become acute.Therefore, governments should consider "ring-fencing" of expenses, whereby,the profits and costs of exploration and development on a license or mining areaare confined i.e. "ring-fenced" to only those associatedwith that licence or mining area. High Grading. major problem, which should be consideredwith many offshore mineral developments, A is that of high grading. If, as it is anticipated,the mining of offshore mineral deposits is both costly and capital intensive there will be a necessityto mine only the highestgrade portions of the deposits.Economically,this can be viewed simply as mining to a high cut-off grade which, onshore,is normally justified on the
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assertion that the lower grade materials can be mined later, However, because of the particular circumstances which surround the mining of deep ocean resources this may not be feasible, as it often is on land, to ass~me that you can go back later and remine the area. Environmental Costs.A great uncertainty with respect to the development of PMS deposits lies in the associated environmental costs and the liabilities that a company may have to assume in order to mine a deposit. Although this is a possibility, studies associated with the proposed development of manganese nodules indicate that environmental costs are not prohibitively high nor is the amount of associated environmental disruption. Although the number of direct and indirect taxes is large, it is encouraging to note that the number of potential tax incentives, which can also dramatically impact the profitability of a mining enterprise, are also quite numerous and are very important. Overall, the fiscal regime of any nation must have sufficient flexibility to be able to accommodate the national policy with respect to mineral development while, at the same time, assure the government of a reasonable "take" from the exploitation of the nation's resources.
Madang Guideline Recommendations

8. Individual nationsshoulddevelop fiscal regime a specific offshore for mineral development accounts the unique that for economic aspects suchexplorationand development, parlicular thehigh costs exploration,development of in of and technology development. 9. Initial offshore mineral developments shouldbe viewed "pioneering as efforts" and as suchbegrantedappropriate economic incentives promote investment to and development.
ENVIRONMENTAL CONSIDERATIONS IN OFFSHORE MINERAL DEVELOPMENT As offshore mineral development increases for new deposit types (nodules and polymetallic massive sulfides) and to deeper portions of individual nations EEZs the number and diversity of actual and possible environmental impacts increases dramatically. Of primary concern for commercial development of these deposits are the assessment and minimization of the potential environmental impacts which may accompany such development. In the following the key factors related to assessing the impact of anticipated exploration and development activities, and a strategy for addressing them and other concerns in an effective and efficient, manner are discussed. The discussion is specific to the exploration and development phases. Although the same general procedures would be applicable to aspects of the exploitation phase the present uncertainty as to how, when and what deposits might be exploited does not allow for a detailed discussion of environmental impacts or required programs. Nevertheless, certain aspects of land-based mineral exploitation environmental policy will undoubtedly be applicable, to a greater or lesser degree, for offshore exploitation. Those aspects, should exploitation take place, are briefly discussed at the end of the section.
KEY FACTORS IN DEVELOPING AN ENVIRONMENTAL ASSESSMENT PROGRAM According to Morgan, (1999) there are three key factors must be addressed in any environmental assessment program; in many ways these dictate the strategy for implementation of such a program. These three key factors are:
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Multiple jurisdictions, rules few As noted many of the primary exploration targets for offshore minerals are located in the territorial waters or exclusive economic zones (EEZ's) with few or no establishedprocedures for offshore mineral development. Others, such as the manganese nodules of the Calrion-Clipperton Zone are located in areas subject only to international law:Even the prospectslocated in the jurisdictions of countries with welldeveloped onland regulatory frameworks presentunique problems becauseof their offshore locations and becausetheir development would not be covered by existing rules. Each site will present different problems and call for the interfacing with different authorities and individuals.
Undefined technologies ecosystems & The history of environmental controversy is full of critical decisionsbased on inadequateinformation, a factor of critical importance when the development of offshore mineral resourcesis considered. Deep seabedmining will consist of unprecedentedcommercial-scalemineral recoveryoperations in seabedareas populated by unique biological communities, many of which, in the caseof those associatedwith polymetallic massive~ulfide deposits,were completely unknown to sciencebefore 1979 and which remain only very poorly characterizedto date. Overall, considerableprogress has been made internationally in the attempt to preserve and enhancethe air, water, land and living resourcesthat are essentialto our survival and despite the bureaucratic chaos and quasi-religious rhetoril:= that unfortunately abound in the generalfield of environmental protection, some genuinely useful ideas have also evolved. Some of these ideaswere assembledin 1979 by the US Council on Environmental Quality (CEQ) into a set of Guidelines that are particularly relevantto the regulation of new industries in poorly defined environments i.e. offshore mineral resources. Two concepts from the Guidelines, "scoping" and "tiering" are particularly to environmental analysisof new activities in frontier areas. .Scoping is defined in the Guidelines as "[t)here shall be an earlyand open process for determining the scope of issuesto be addressedand for identifying the significant issuesrelated to a proposed action. This process shall be termed scoping". Scopingbegins when the subject of an environmental analysis, prothe posed action, is sufficiently defined to permit its reasonedevaluation by all interested parties. It consists of public hearings,private interviews, and literature surveys.It culminates in a scoping report that describesthe concerns raised in the process and the means chosento addresstheseconcerns. Scoping compels the environmental assessment include the following rules: to 1. A definition of the proposed action which is detailed enough to permit meaningful environmental impact analysisand 2. An iterative and open project review procedure that can identify and set priorities for the issues considered in the analysis. Tiering is defined as "...the coverageof generalmatters in broader environmental impact statements with subsequentricher statementsor environmental analyses...incorporating reference the generaldiscusby sion and concentrating solely on the issuesspecific to the statementsubsequentlyprepared". Tiering allows preparers of EIS's to "...focus on the issueswhich require decision and exclude from consideration issues alreadydecided or not yet required". Tiering implies the following additional rules for efficient and timely impact analysis:
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3. Phasingof the resolution of environmental issuesto be compatible with the schedule of activities contemplated in the proposed action. 4. Whenever possible, separateenvironmental issuesfrom governanceissuesand generalissues from specific issuesand deal with eachas appropriate. The responsible implementation of the principles of scoping and tiering effectively addressesboth the objectives of industrial development and environmental protection. In addition to the above overarching concepts Morgan (1999) has defined three additional mechanismsthat are particularly useful in environmental assessments marine mineral resourcesthat are summarizedas follows: for Bootstrapping. When activities cannot be adequately defined, phase their regulation to cover the front-end, well-defined portion of the activity. Through monitoring and disclosure requirements,structure eachphase of regulation to include definition of the next phase. Consolidated Procedures. When the activities are well-defined, organize the permitting procedures as much as possible into a single process with specified time limits for each step. However, do not attempt to overstructure activities which are not well-defined. Representative Committees. Whenever possible, channelthe identification and resolution of environmental issues through an independent group composed of representativesof all interested parties rather than through hired staff. This permits identification of the key issuesin time for their resolution and also provides an objective guidance of the assessment process. In summary, government and industry are faced with a variety of potential environmental regimes in their development efforts, many of which are not yet in place. In particular industry faces particular challenges related to environmental impact issuesbecauseof: (1) the relativelyundefined nature of the deposits to be mined and the systemsto mine them; (2) the popular mystique of anything related to the oceansand the political forces which thrive on them; and (3) the genuineissuesassociatedwith associatedunique ecosystems. Hydrothermal vent communities. The next section outlines the important aspect~of the hydrothermal vent communities of concern.
OUTLINE FOR IMPACT ASSESSMENT EFFORTS
Based on the considerationsprovided in the precedingsections,the following approach may be appropriate for undertaking an environmental assessment offshore mineral resources. Although all of the for following stepswould be undertaken for each assessment levels of effort would vary significantly in the responseto the specific needsand priorities of the individual nation and the resourcesto be developed: Overall, schedulesfor the various environmental assessment activities would be driven completely by the exploration and development scheduleswith the overall procedure initiated concurrently with the permit acquisition process. Discussion of environmentalissuesshould be included during the initial contacts between government and industry to demonstrate the unanimous commitment to environmental protection by both sides.
5 coping and tiering
As discussedabove,this is probably the most important part of an assessment program. The key items that must be accomplished in this component are:
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THI~ MADANG GUIDEUNES
1. Identify and analyzethe legal and regulatory regimes which will control the exploration, mining, and other activities, including the lines of authority, participating organizations,and pertinent rules (if any); 2. Identify and examine the chains of authority to elucidate,if possible, any potential conflicts of interest among agencieswith regulatory responsibilities; 3. Complete a development scenario which describes,in as much detail as practical at the time, the planned activities of exploration, mining, transportation, processing,and waste management; 4. Establish an advisory board for each assessment program, to include representatives industry and of the organizations with authority, technical experts (e.g.,scientists,local fisheries biologists), and representativesof potentially interested parties (e.g.,from tourist bureaus,fisheries organizations,environmental groups); 5. Hold public hearings and information exchangemeetings within the appropriate jurisdictions to present the development scenario and to provide an open forum for the expressionand documentation of environmental issues;and, 6. Complete a scoping report which: (a)identifies the primary issuesthat will require assessment and those that do not; and CD) provides a specific plan for the assessment effort. Environmental programs include tasks in the following categories.
Compliance tasks These are the assessment tasks that are specificallyrequired by the appropriate regulatory regime. They include such things as the acquisition of permits for land-basedactivities, vesselinspection certificates,and completion of environmental assessment reports, if required. In a jurisdiction with well-developed environmental regulations, these tasks form the bulk and heart of the assessment effort. In jurisdictions with few and unstable regulatory regimes, they will constitute a variable part of the job. It is important to distinguish such tasks from the primarily technical task of environmental assessment and from the primarily public relations task of public education,desc,ribed below.
Assessment tasks These tasks include the formal assessment work that must be done to addressthe environmental issues raised by advisory committees and at public hearings.The result is an environmental assessment report or statement that covers the following topics: .A description of the laws,regulations, or formal agreementsunder which mining activities will be carried out detailed summary or complete presentation of the development scenario description of the potentially affected environment, focusing particularly on those resourceswhich have been raised as issuesof concern in the scopingprocess analysisof environmental effects and necessary plans for mitigation, if necessary of the processby which issueswere identified for analysis
.A .A
.An
.Documentation
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Rtsearch datagathering and activities It may be advisableto sponsor limited researchand/or data gathering activities in the exploration areas to addresscritical issuesof concern. However, such work should be undertaken only after it is deemed necessary during the scoping processand after its objectives and methods are clearlydefined. When possible, researchand data gathering activities should be carried out in conjunction with exploration field activities. Collection of baselinedata and execution of field experiments can often be tied very efficiendy to exploration activities with minimal interference and relativelylitde expense.
Publiceducation tasks It may also be advisableto sponsor efforts to distribute researchor assessment results in public forums and using attractive presentation methods. Such tasks should also be identified specifically in the scoping analysisas particularly controversial or subjectto widespreadmisunderstanding.In such work it is very important not to replace substancewith format; presentationsshould be clear,well documented and supported by independent experts.Public workshops can provide visibility and credibility to the program efforts and can enlist the help of acknowledgedworld experts to assistin the design of the program plan.
ENVIRONMENT RELATED CONSIDERATIONS FOR EXPLOITATION
As noted previously, the high level of uncertainty that is presendyassociatedwith possible offshore exploitation of deep seamineral resources,in particular polymetallic massivesulfides,make it difficult to assess detail the structure of an appropriate environmental regime for their environmentally responsible in exploitation. However, many of the basic components of the environmental regime for onland mineral exploitation will, to a greater or lesserextent, be applicable to offshore mineral developments.It is important to note that for most nations there will be a need to either draft new environmental policies and legislation that are specific to offshore mining or, alternatively,to extensivelymodify existing policy and legislation. The key components of an offshore mineral exploitation environmental program, based on onland practices, would include, but not be limited to, the following components.
CriteriaRegulations Becauseof the number of unique deposit specific project activities that are anticipated to be associated with offshore mineral exploration, the most obvious being mining at extreme depths on the oce~nfloor, there will be a need to set criteria for categorizing individual activities as a precondition for establishing environmental guidelines.
Fee, Levies Bonding and Rtgulations Similar to onland mineral exploitation activities a comparable set of fees,levies and bonding will have to be developed for offshore mineral exploitation. Although the basic typesof fee regulations will apply they will undoubtedly vary considerablyin terms of magnitude (actual amount of the fee, levy or bond) and timing (the overall time period for which they will apply). This will presenta unique challenge for botn government and industry to develop a fiscal regime that is not punitive, with respectto impacting the eco~ nomic viability of the project, but ensure protection of the environment. Existing uncertainty with regard to
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THE MADANG GUIDELINE5
the typesand extent of environmental impacts, particularly in terms of the extent and timing of rehabilitation, make the development of a realistic fee regulation systemhighly problematic at the present time. As with onland mineral exploitation projects, the developmentof a comprehensiveEnvironment Mining Plan (EMP) will be essential for both government and industry in order to ensure environmentally and economically responsible exploitation. Initial plans will need to be flexible and provide for regular updating and modification as experienceis gained with the actual exploitation process.In particular, the EMP will be critical in initially defining the scope and cost of bonding and subsequentlyin determining any changes needed in the bonding procedure. Environmental bonding will representa particular challengeinitially requiring (a) the definition of the type and impact of the mining method to be utilized, the establishmentof suitable environmental guidelines for monitoring the exploitation activities and (c) the establishmentof mitigation and rehabilitation costs for a new type of mining activity. Nevertheless,a systemthat includes, at a minimum, a bonding procedure for rehabilitation and reclamation will be required. Such bonding may also be for non-conventional aspectsof rehabilitation and reclamation; such as reclamation and rehabilitation to reestablishecosystemdiversity in the exploited area.
Environmental Policy on Offshore Waters
In the majority of nations there is alreadyin place environmental policies and legislation which are specific to onloand and nearshore water resources:normally under either a specific Water ResourcesAct or as a major component of Environmental Protection, Environmental Planning and/or Environmental Contaminants acts.The Water ResourcesAct will normally deal with licensing of water abstraction and discharge of wastewaterinto any water body; the Environmental Protection Act normally covers general pollution control and the registration of contaminants and the Environmental Planning Act covers the Environment Plan (EP) Approval process.This latter activity will be extremelycritical in that it will detail the specific studies and reporting that will be required to enablegovernments to closely monitor offshore exploitation activities. Each of these acts,if they exist, will undoubtedly need to be modified to accommodatethe unique aspectsof offshore mineral exploitation and overall operations within the open oceanmarine environment. Alternatively, governments may wish to develop new policies and legislation, that are specific for offshore mineral exploitation, that specificallyaddresses marine environment. the
Enforcement Policy
In addition to the unique aspectsof environmental monitoring an equally complex, and closely related, area of concern during the exploitation of offshore mineral resourcesis that of enforcement. Becauseof costs,accessand availabledata with respectto offshore mineral exploitation the enforcement policy will need to rely heavily on reporting by industry, to a lesserdegree on marine researchers and, perhaps least, on actual compliance evaluationsby the State.Therefore it is necessary that the enforcement policy be closelylinked with activities mandated in the fee regulations (particularly the bonding procedures)and the environmental policy for offshore waters. Additionally, enforcement policy should also include details of operational proceduresand industry codes of practice that can normally be more easilymonitored for compliance and de facto help to ensure compliance in associatedactivities less easilymonitored.
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THE MAOANG GUIDELINES

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ASSOCIATED ISSUES In the preceding discussions emphasis has been placed on the major issues which government and industry must consider in developing t}te policy, legislation and guidelines which are needed for socially responsible sustainable development of offshore mineral resources. The development of offshore mineral resources, however, must consider a number of other impacts and issues that will be associated with offshore mineral development. Among the most important of these are issues related to stakeholder interests, fisheries and scientific research in the areas of offshore mineral development.
Madang Guidelines Recommendations

10. Recognising appropriate instrllmentswithin the 1982 Conventionregarding conseroation management the the and of the living resources within coastal states' EEZs, measures shouldbe taken to minimiseadverse i"pactsto the marine environment and to traditional and non-traditional uses the seathat mqy be caused offshore of by mining. 11. Where appropriate,coastalstatesshouldconsider making a declaration that the non-living resources btyond the 3-mile limit from the Provincial coastlines a "CommonHeritageof theNation". are 12. Coastal statesshouldadopt a proactiveapproachin all significantdecision making activitiesrelatedto environmental concerns associated with offshoremineral explorationand exploitation. 13. The collection baseline of environmental data shouldbe a conditionof any marine explorationlicence. Collectionof baseline data shouldbeginas earlY possible as followed by rystematic data collection throughoutthe ter", of the exploration licence.
ASSOCIATED ISSUES IN POLICY FORMULATION In the preceding discussions, emphasis has been placed on the major issues which government and industry must consider in developing the policy, legislation and guidelines that are needed for socially responsible sustainable development of offshore mineral resources. The development of offshore mineral resources, however, must consider a number of other impacts and issues that will be associated with offshore mineral development. Among the most important of these are issues related to stakeholder interests, fisheries and scientific research in the areas of offshore mineral development (Lola 1999, Kolkolo 1999).
StakeholderInterests The number and special interests of potential stakeholders which are directly or indirectly impacted by offshore mineral development are large and varied and beyond the scope of the present discussion to deal with in detail. Defining the number and interests of the various stakeholders that may be impacted by offshore mineral development is further compounded by the fact that since offshore mineral development creates a new development environment there will undoubtedly be a number of stakeholders and interests that cannot be anticipated at the present time. Therefore, it is of great importance that the stakeholders and their interests, in particular, the "new" stakeholders and the issues that are associated with them, are identified and addressed at the outset of the development of any policy and regulatory regime. In the following a brief overview is given of some of the different stakeholders and their concerns that one would expect to encounter with an offshore mineral development program within the EEZ of island nation in the Pacific. This scenario has been chosen because of the ongoing projects for the development of
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manganesenodules in the EEZ of the Cook Islands and the recent issuanceof exploration licences for polymetallic massivesulfides in the EEZ of PapuaNew Guinea: two areasof ongoing exploration and possible development in the near term (5-10 years).
Thestakeholders According to Lola (1999), the most obvious stakeholdersin offshore mineral development are the government and industry whose interests are relativelywell-defined in government policy and industry's objectives in offshore mineral development. In general,the following individuals or entities can be identified as the principle stakeholdersin any offshore mineral development: .National .Industry .Provincial .Local .Coastal .Marine government (including stockholders) governments
level governments communities scientific researchers and researchers undertaking other researchactivities fishing industry participants, including traditional fishermen operators, including other marine navigators and users groups, including environmental groups, conservation groups SeabedAuthority
.Commercial .Shipping .Interest
.International .Landowners
It should be emphasizedthat although all of the above stakeholdershave sharedinterests they may use completely different, and at times conflicting, methods to realize their basic objectives.
Stakeholder interests Stakeholderinterests are normally defined in terms of the claims by individuals or organizations of ownership and/or user rights, perceived or otherwise, that they exerciseover the offshore area.Normally, the State'sassertion of ownership rights over mineral resourcesin the offshore areastems from the ownership rights vested under a national constitution that almost alwaysgrants total ownership rights to the State over the natural resources within its territories (including the EEZ). Some activities relating to offshore mining operations may, however,take place onshore in which customarylandowners may asserttheir ownership rights over their customary land. Other stakeholdersmay not assertownership rights but they can still assertsome form of user rights in the offshore areasand, therefore, their interests,or the interests that they represent,will have to be considered. For example, stakeholders,such as traditional fishermen and local coastalcommunities may assertuser rights over certain reefs or traditional fishing grounds.
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Some stakeholders,such as commercial fishing industry participants, may assertrights that ate inherently theirs by virtue of the terms of bilateral and multilateral agreementsthat are in place, that accord them the right to fish within the EEZ. The commercial fishing industry participants are an important group of stakeholdersprimarily becauseof the fact that in most nations they are alreadyoperating in the offshore areasthat are now being considered for mining activities. A researchermay assertcertain rights, including the right to be in a particular place to conduct Marin~ Science Research(MSR) or other forms of research,on the basisof existing agreementsor other forms of approval that they may have received from the State or its relevantagencies. In the caseof industry, a stakeholder,sucha petroleum company may asserta right, to be in the offshore, pursuant to the terms of a petroleum agreementthat it has with the State,which permits it to carryon petroleum activities in the offshore area.Similarly,a mining company may assertthat it has a statutory right to be present offshore through an exploration licence that it has beengranted under a nation's mining act. Likewise, a shipping operator may also asserta right becauseit has beenlicenced under the relevant shipping laws to operate a particular route. The particular interests of the mining industry are discussedlater in this analysis. Provincial governments and local level governments may assertrights in relation to the sharing of benefits emanating from the development of a natural resource.In fact, in many nations (Indonesia, Papua New Guinea, Philippines) the Stateis obligated under various "decentralization acts" to share suchbenefits with these second and third tier governments. In some nations (Indonesia and Papua New Guinea), State mineral corporations may assertthat, pursuant to enabling legislation which accorded it the right to be an entity, it has a right to participate as the State nominee in any mining project.
Stakeholder issues Issues of interest to the above various stakeholdersare varied and very much depend on the rights that they are assertingin relation to the offshore areas. The common issuesof interest to most stakeholders would be for some form of compensation for the loss of certain rights due to offshore mineral development .As an example,the commercial fishing industry may find that mining activities may curtail their activities and, hence, they ought to be properly compensatedfor any loss that arisesas a result of their forced curtailment of fishing activities. Similarly,coastalcommunities and traditional fishermen may also seekcompensation for the loss of their traditional fishing ground and reefs: accessto which may be restricted as a result of mining activities. Issues of stakeholderinterest to the Stateare particularly complex in that there are a number of issues that are of concern to the State directly as well as a number of issuesof interest to the State indirectly as the representativeof other stakeholders(local governments in particular). Among the most important issues are those that pertain to the State'sright to participate directly in the developmentof an offshore mineral project and the terms and conditions of such participation. Other important issues,of direct interest to the State, relate to the various taxes and other imposts that the Stateadopts as part of its fiscal regime for offshore mineral development projects, infrastructure developments by industry, job training for nationals to facilitate their taking more for more skilled jobs within the operations of a mining company.The Stateis also interested in seeing that the development of a mining project is carried out in a manner that has minimal environmental impact.
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Provincial governments and local level governments would want to see that existing provisions of legislation pertaining to decentralization and resource rent revenue sharing (Clark, 1999) are rigorously adhered to by the national government so that they can also receive benefits, including royalties, that arise from development of any offshore mineral development project. Both provincial governments and local level governments will want infrastructure to be developed by developers operating in their areas. Non-governmental organizations (NGOs) have taken a great interest in issues surrounding the development of natural resources in general and in particular with regard to the impact of mining activity and the distribution of resource rents associated with such developments (Clark 1999). Such organizations will undoubtedly be interested in a host of issues, in particular, those relating to the environment. and the conservation of the "pristine" environments that are found offshore. Equally of c.oncern will be issues related to the unique biota that are associated with the areas of high mineral resource potential, in particular those associated with areas of ongoing formation of polymetallic massive sulfides.
Forum to Address5 takeho/der Issues The stakeholder issues in relation to a new offshore mineral development will almost always involve the State, the landowners, the provincial governments, and local level government. The specific issues of importance to each of the stakeholders will usually be considered at a forum, or a series of forums, specifically convened to deal with those issues. Decisions and agr~ements reached at the forum on issues relating to royalty distributions, equity participation (basically the sharing of the portion of project equity available to the State), additional grants from the national government, and commitments from the national government on infrastructure development should be recorded in specific Memoranda of Agreement that are executed between the State, industry, the provincial governments and the landowners. Stakeholder issues that involve the State and industry are usually considered in meetings held between the parties, either in specific meetings to consider specific issues such as financing plans, or through a negotiation process. The State normally establishes an inter-departmental negotiation team with the responsible natural resource agency, normally a Department of Mineral Resources (DMR), playing the lead role. This team is the government's representative body that can enter into negotiations with industry on stakeholder issues of mutual interest to both with the objective of formulating an Offshore Mineral Development Contract (OMDC). When concluded, the OMDC is the document that stipulates the binding obligations and commitments of both parties in relation to the development of a project. The developer's approved proposals for the development of the project forms part of the MDC. The State, through its respective agencies, is also required to give separate approvals relating to industries proposals for development, its financing plan and the environmental plan, among others.
Madang
Guidelines
Recommendation
14. Stakeholder groups and their interestshouldbe clearlY definedduring theformulatt"onof a'!) OffshoreMineral Development Agreementto ensurethat the interests the stakeholders adequatelY of are considered and; Jllhere appropriate,incorporatedinto the agreement.
28
.fOP./1CMiscel/aneONS Report 362
THI~ MADANG GUIDELINES
FISHERY CONSIDERATIONS IN OFFSHORE MINERAL DEVELOPMENT
According to Kolkolo 1999, the coastline and offshore archipelagosof individual nations presents a great diversity of coastal types and marine environments characterizedby large delta areas, mud flats, mangrove swamps,fringing coral reefs, narrow lagoons, lakes,rivers and extensivesystemsof marshes.The extensive coastaland offshore areasnormally occur within the boundaries of a number of coastal provinces, many of who have considerableautonomy. Additionally, many of the provinces have considerable autonomy in regard to fisheries development/managementand share in the revenuesgeneratedfrom fishery activities within the extended jurisdictional boundary of the individual provinces seawardinto the territorial seaand the EEZ.
Potentialimpactsonfisheries
Becausethe scope,location and specific impacts of offshore mineral development activities are largely unknown at this time, there is little that can be said with respectto specific impacts and or policies visa vis such developments and fisheries.A number of concerns can be identified, however,which will need to be addressedby government and industry should suchdevelopmentstake place. Among the most significant are the following: 1. Disruption of the Seafloor: Virtually any foreseeablemining venture will require extensive disruption of the seafloor with varying impacts on biota; 2. Waste disposal: The mining operations will produce waste materials both at the mine site and, if different, at the site of processing.The former will normally be in the deep oceanand the latter near shore thereby impacting a number of habitats; 3. Restrictions on access: The mining activity will necessitatethat the areasof primary operation be (a) declared off limits for other activities or (b) that other usesbe restricted in scope and areaof operations; 4. Fishery impacts: The mining operation will have multiple impacts (both good and bad and many of which cannot now be predicted) on fisheries in the areasof activities; and, 5. Economic, social, cultural and environmentalimpacts: The mining activity will, in most casesand to varying degrees,have national, provincial and local impacts on the economy, environment, social institutions and culture. The fisheries of most nations are (a) biologically diverse; (b) wide-spread throughout many marine environments; and (c) are comprised of a wide range of fishing operations ranging from local subsistence fishing to large-scalepurse seining.
Research development and issues
Given the above potential impacts of offshore mineral resource developmentoudined above the following researchand development issueswill need to be addressedin the formulation of a comprehensivemarine mineral resource development policy which is sensitiveto fisheriesdevelopment.
SOPACMisceJ/aneous Report362
29
THl~ MAOANG GUIDEUNES
1. Diversity of fishery resources: The diversity of fisheries and their associated ecosystems necessitates that a comprehensive program be initiated to protect biodiversity and to ensure the preservation of marine fishery habitats both near shore and in the deep ocean; 2. Zoning of the sea areas: Because of the above mentioned need to protect the biodiversity within the fisheries, the scope of fisheries-related activities throughout the EEZ and the requirements of individual treaties and agreements, it will be necessary to consider a zoning of sea areas for specific uses; and, 3. Impact assessment and compensation: Appropriate programs will need to be developed for the assessment of, and compensation for, impacts of marine mineral resource development activities on traditional and commercial fishery activities. For most countries there is a growing concern over the development and sustainability of their coastal and inland fisheries. To facilitate such developments it is important that government and industry consider joint development activities: in particular, the government and industry (fisheries and minerals) should consider the possibility of joint development of industrial support facilities that could service both industries and allow for additional development (mineral processing, fish canning).
Policy considerations As a signatory to numerous regional and international agreements, many of which are specific to the fisheries and/or offshore mineral resource development activities there is a need to ensure that offshore mineral development activities are in compliance with regional and international agreements. Among the most significant are the United Nations Conventionon the Law of the Sea (UNCLOS) and theAgreement the for Implementation the Provisionsof the United Nations Convention the Law of the Seaof 10 December1982 Relating to of of the Conservation and Management Straddling Fish Stocksand H,ghfyMigratory Fish Stocksand the WashingtonConvenof tion on International Trade in EndangeredSpecies Wild Fauna and Flora (CITES) (Kolkolo 1999). Therefore, there of is a need to conduct a policy and legislative review of existing (and proposed) fisheries and minerals related legislation, agreements (bilateral, multi-lateral) and relevant contracts to ascertain what issues exist that may require resolution/coordination with regional and international bodies.
Madang
Guidelines
Recommendations
15. Appropriate programswill needto be developed the assessment and compensation impactsof marine mineral jor oj, jof; development activitieson traditional and commercial fishery activities. 16. Tofacilitate thedevelopment sustainabiliryof nationalfisheriesgovernment industry shouldconszaer and and Joint developn,ent industrial supportfacilities that couldservice of both industries and allowfor additional development (n,ineralprocessing,fishcanning).
INDUSTRY IN OFFSHORE MINERAL DEVELOPMENT According to Malnic, 1999, for successful minerals exploration and development to proceed in the offshore areas of any nations EEZ, there is a need to consider the specific needs of the potential investor who will be required to make the necessary investment for the exploration and development of any commercial mineral deposits. The basic issues of security of title, tenure, levels of investment, work programs and
30

-
the fiscal regime for development have been previously discussed.However there are a number of other issues that must also be considered and may need to be specificallyaccommodated in national policy and legislation. Among the most significant of these are the following: Data Reporting ConfidentialitY and -Government legislation and UNCLOS stipulates that all data gathered within a license area,or within the EEZ in the caseof UNCLOS, should be deposited with the host nation. These requirements, however, immediately raisetwo fundamental questions that each nation will need to address. 1. Since the data collected from offshore mineral exploration ranges from physical samplesof tonnes of sulfides,buckets of mud, water samples,crates of deep sea clams,and hydrothermal fluid samples how will the data be stored so that it is preservedand accessible? Currendy few countries and! or government agenciesare capableof effectively handling suchdiverse samples. 2. How can the present systemof publicly accessible'Open File' and confidential 'Closed File' material that is in use by most nations be refined to cope with the status of researchmaterialsgathered within industry's licence areas? Currendy, such researchmaterialsare placed in Open File reports that are almost immediately availableto the generalpublic. The scientific conclusions from the researchmay be published a year or two later. Guaranteed Berths -At present the normal protocol for offshore mineral exploration and researchis that representativesof industry, researchorganizations and! or government are offered berth on the various cruises: a systemwhich has worked well in the past but may be the subject of concern in the future. Indeed to addressthis issue in the SOPAC area,the SOPAC organization developeda protocol of cooperation in a 1998 collaboration betweenlicence holders and researchers, specifically,to addressthis issue. However, assuming a more intense future for mineral exploration, industry believesthat the conditions regarding collaboration, applicable to researchers and industry, should ideallybe stated in nationally promulgated law and implementing regulations and in a way that does not di~couragetesearchersor bury them in pilperwork. Trespass onshore mineral exploration licencesaccess the licence area can be closelycontrolled and -In to is not allowed without a formal accessor joint venture agreement.However, control of suchaccessoffshore within the EEZ, particularly for researchpurposes and by competitors, will be difficult to monitor and enforce. Ensuring the integrity of licence areasmay require specific agreementsbetween government and other users of the EEZ, which specificallypreclude trespass. Intellectual Property -Because many aspectsof offshore mineral exploration and development associated with new offshore mineral deposits will require the developmentof new technologies,and result in new knowledge regarding the mineral occurrences,individual companies will acquire unique capabilities,expertise and knowledge, i.e., intellectual property. This intellectual property will have significant economic importance for the company that develops! acquires it and, consequendy, they will want keep the knowledge for their own benefit. Where presendy not accommodatedprovision to accommodatethis issue should be incorporated in the policy and legislation of individual countries. Disclosure Affiliation -In caseswhere research of activities are approved and condu<:=ted within licence areasthere is a need to ensure that full disclosureis made with respectto the individuals participating in the researchand the extent, if any, of their interest in other commercialenterprises.This disclosure should state explicidy that representativesof competing companiesare not on board and that information will not be given to competing interests without the licence holder's approval. Overall, the basic concerns of industry with respectto the exploration and development of offshore mineral resourcesdo not differ gready from those concerns that industry has for exploration and development on land. However, the vastnessof the oceanenvironment and the resulting difficulties of maintaining
31
the integrity of access to the license area make it imperative that government, industry and research organizations work closely and cooperatively.
Madang
Guidelines
Recommendation
17. Offthore mineralpolicy and legislation shouldensure confidentiality corporateresearch development the of and data within their license areal s.
MARINE SCIENTIFIC RESEARCH The identification of the majority of the mineral resources which are of commercial interest to industry at the present time were originally discovered and defined on the basis of marine scientific research. Only after considerable additional marine research did such occurrences begin to have commercial interest and to be sought after by industry. Therefore, the scientific community has a vested interest in continuing its research on the discoveries they have made, even after licences have been granted, and because of their unique knowledge and expertise, it is also of interest of both industry and government that they continue their research activities. As a result the major question that emerges is how can scientific research continue while at the same time respecting the constraints of private industry? To accomplish this mutually beneficial cooperation a number of specific issues that overlap with the concerns of industry must be addressed (Malnic 1999). Among the most significant are those related to the following issues: Onboard Industry Representatives -Marine mineral research is a costly endeavor with research vessels costing as much as US$20,OOO/day (and more) to charter and with an "at sea" research project costing approximately one half million dollars per year. Additionally, for many nations one of the primary justifications for the large quantities of government funding dedicated to research, and the access that researchers seek in foreign waters, is the expected economic benefit of the research. Nevertheless, the issue of having an industry representative onboard and participating in marine scientific research is both simple and complex. In the special cases that marine scientific research is taking place within the licence area of industry, it would seem to be a simple decision to grant the industry a berth to participate in such research. Conversely, in nonlicenced areas the issue is more complex and the presence of an industry representative raises two questions. First, does the presence of an industry representative give that individual's company a comparative advantage over other companies? Second, what should be the terms and conditions for granting an industry representative access to the research data, particularly with respect to the use and release of the data? Research AccessPriorities -As noted previously the vast majority of the mineral occurrence of present interest to industry were initially discovered as a result of marine mineral research activities. Once discovered and subsequently licenced by industry, however, the question arises with respect to whether the scientist who discovered the occurrence has priority over other researchers for the study of that occurrence. To resolve this issue it is suggested that nations (individually regionally or internationally) should develop a Set of guidelines that would bestow some privilege of priority to the researcher of discovery. Industry-Research Cooperation -The mutual rewards to be derived from industry-research cooperation are already considerable and expected to increase in the future as offshore mineral exploration and development activities increase. Industry-research cooperative efforts are not without problems however, particularly with respect to the release of data and scientific findings as has been noted earlier. To a large extent industryresearch cooperation can be achieved by establishing a working arrangement by which the research organization is a "consultant to", rather than "working for", industry. In such a cooperative arrangement, the research
32
SOPACMisce/laneoHs Report362
organization Although tions
can assist industry such an approach the required
while result.
simultaneously
pursuing
its own research agenda in the same area. than "substance", detailed negotia-
may at first appear to be more "definition"
can produce
Government-Research Cooperation -The tions for marine mineral research within and fruitful UNCLOS individual purposes the purposes for both parties that mandates of marine nation
cooperation the EEZ
between individual has been further
governments strengthened
and research instituand codified EEZ under for of an
of the individual
governments
has been both the norm to a nation's
for decades. This
relationship
that access be granted, scientific
except under special circumstances, however,
research. It must be recognized, of marine scientific by the government.
that entry into the EEZ
must be for the purposes approved
research only and may not be for commercial
unless specifically
The above issues are critical within the EEZs of individual mineral will be the economic
to resolve in order to ensure the continuation and a continuous of the future. flow of new scientific
of marine mineral discoveries;
research
nations deposits
many of which
Madang Guidelines Recommendations

18. To ensure the long term capabilitY of the coastal states to effectivelYmonitor offshore mineral resourcesactivities, relevant government representatives shouldparticipate in all at-seaphases of MSR, exploration and evaluation and that provision be made, either through appropriation or the creation of special usefunds within the responsible agenry(ies), to provide adequate human and fiscal resourcesrequired for neededdata collection and collation, lHonitoring and enforcement activities. 19. Recognising the unique nature of the biota associatedwith ach"vehydrothermal zones, activities that ensure an adequate understanding of the biota communities and the impacts of a'!Y associated mineral exploration and exploitation should be undertaken by MSR and Industry.
SOPAC Miscel/aneolls 362 Report
33
ACKNOWLEDGEMENTS
The Offshore Mineral Policy Madang Guidelines becamea reality owing to the invaluable contributions of severalcommitted organisationsand individuals. We wish to acknowledgethe Department of Mineral Resources, PNG for hosting the workshop; the Metal Mining Agency of Japanand the Forum Secretariatfor sponsorship. Our gratitude goes to the authors of the paperswho set the tone and developed the eclectic framework for the discussions.A specialword of mention to Dr. Allen Clark, East West Center, Hawaii for playing a key role during the conference and helping compile and edit the papers for the Workshop report (SOPAC Miscellaneous Report 323). SOPAC is proud to have co-ordinated the workshop and to present here the Madang Guidelines on offshore minerals policy (SOPAC Miscellaneous Report 362).
34
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THE MADANG

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